Upland Software, Inc. — financial distress indicators
Financial-health summary
Upland Software, Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 88/100). The main indicators are market-implied default probability >20%, losses in each of the last 3 years and thin interest coverage. Independently, the Ohlson accounting model puts its 1-year failure probability at 89% and the market-implied (Merton) default probability is 99.2%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Merton distance-to-default -2.39 σ → PD 99%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Interest coverage is only 1.18× (lenders typically require ≥ 2–3×).
Low coverage leaves little buffer against a profit dip before a debt-service or covenant breach.
Total debt is 6.5× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
Price is -86% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 2.10 → model probability 89%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.84.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Revenue changed -21% year over year.
Falling sales reduce cash available for debt service.
Revenue declined every year for three years.
Structural, not cyclical, decline.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- High insider/promoter ownership (31%) aligns management with survival.
📰 Recent news scan
- Sales And Marketing Software Stocks Q1 Recap: Benchmarking Upland Software (NASDAQ:UPLD)Yahoo Finance · 2026-09-16
- Commvault, Sprinklr, Upland Software, Samsara, and Cadence Design Systems Stocks Trade Down, What You Need To KnowYahoo Finance · 2026-09-01
- 3 of Wall Street’s Favorite Stocks We Steer Clear OfYahoo Finance · 2026-08-28
- Upland Software and Carahsoft Partner to Expand Public Sector ImpactYahoo Finance · 2026-08-17
- Upland Software Named in the 2026 Gartner® Magic Quadrant™ for Customer Service Knowledge Management SystemsYahoo Finance · 2026-08-06
- Upland Software Publishes CEO Letter Outlining Strategic PrioritiesYahoo Finance · 2026-07-28
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Upland Software, Inc.'s financial-health indicators show?
As of 2026-10-08, Upland Software, Inc.'s public financial data places it in the 'Very weak' band with a distress score of 88/100, driven by market-implied default probability >20%, losses in each of the last 3 years and thin interest coverage. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Upland Software, Inc.'s financial distress score?
88/100 ('Very weak'). Ohlson O-score 2.1 (model 1-year failure probability 89%). Merton distance-to-default -2.39 σ (model default probability 99.2%).
What works in Upland Software, Inc.'s favour?
Operating cash flow is positive over the latest 12 months. High insider/promoter ownership (31%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other IT & Software companies with distress indicators
- Cyabra, Inc. (CYAB)Very weak 100/100
- Exyn Technologies, Inc. (EXYN)Very weak 100/100
- The OLB Group, Inc. (OLB)Very weak 100/100
- Roadzen, Inc. (RDZN)Very weak 100/100
- Rekor Systems, Inc. (REKR)Very weak 100/100
- Veea Inc. (VEEA)Very weak 100/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.